According to latest Omdia research, the world market for packaging machinery is estimated to have been worth $43.1 billion in 2019 and experienced solid growth (3.9%) during the year. However, the forecast for 2020 was downgraded primarily as a result of the novel coronavirus (COVID-19) pandemic and the subsequent economic shockwaves.

Timing the Rebound – Packaging Machinery Market Outlook

According to latest Omdia research, the world market for packaging machinery is estimated to have been worth $43.1 billion in 2019 and experienced solid growth (3.9%) during the year. However, the forecast for 2020 was downgraded primarily as a result of the novel coronavirus (COVID-19) pandemic and the subsequent economic shockwaves.

The disease has infected and killed tens of thousands worldwide, leading to shutdowns in several major countries as well as shuttered factories for an extended period. The Covid-19 pandemic has had a devastating impact on the global economy including plummeting oil prices, rising unemployment, and declining capital investment. So, it is no surprise that overall machinery sales as well as the packaging machinery market are also hurting.

What looked to be a positive and promising year for packaging machinery sales is now expected to see a revenue decline of almost 15% year-on-year. A silver lining, to the current Covid-19 storm, is that a good percentage of suppliers entered 2020 with healthy order backlogs of 6 months on average. This should help keep companies afloat as they navigate these unprecedented challenges.

Sales can only be propped up so long without new orders replacing them. In April, one supplier stated, “We are starting to get calls to cancel orders or notifications that buyers won’t be able to make their final payments due to the Covid-19 shutdown.”

However, it is not all doom and gloom. The demand for packaged goods through E-commerce giants like Amazon, Alibaba, and Walmart has skyrocketed during the shutdown. Consumer purchasing habits will likely shift dramatically during this period. Consumer packaged goods companies (CPGs) and packaging machinery suppliers alike need to stay nimble to changing needs in order to capitalize on the pent-up demand as conditions gradually improve during the second half of 2020 and into 2021.

Taking into account this level of market uncertainly, Omdia has produced three forecast scenarios for the global packaging machinery market. We are currently projecting a gradual recovery with a return to revenue growth of 1.6% in 2021, as seen in the baseline scenario. A second wave of outbreaks, including another round of shutdowns, would likely lead to a prolonged decline through 2021, as seen in the worst case scenario. However, if there is swifter resolution to the pandemic in 2H 2020 it would likely bring about a more pronounced rebound in packaging machinery sales as seen in the best case scenario. We will continue to monitor the ongoing market dynamics and trends as part of our Manufacturing Technology research area.

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